Posts Tagged ‘resale royalties’

Lawsuits Over Unpaid Artist Royalties

November 1, 2011

Whenever a work of fine art is sold and the seller resides in California or the sale takes place in California, the seller or the seller’s agent shall pay to the artist of such work of fine art or to such artist’s agent 5 percent of the amount of such sale.   (California Civil Code §986(a)).

As the New York Times reported today, as a class action plaintiff, Chuck Close  is suing auctioneers Sotheby’s, Christie’s and eBay in relation to the section of the California Art Resale Royalties Law quoted above. If an art seller resides in California, the obligation to pay the royalty may include sales that occurred outside of the boundaries of California as well, and potentially, some sales of American artwork that may have occurred outside of the country.

According to the report, two related lawsuits for failure to pay royalties to artists seek disclosure of the identities of art sellers–including sellers who live in California– and by extension, seek to identify sellers who did not pay the required 5% royalty to artists on profitable sales.   Knowledge of seller identities is critical for enforcing the law and ensuring that artists’ rights to the royalty payment have not been violated.  The information concealed by the auctions is, as attorney Eric George noted, “the very information necessary to know whether a royalty is due.”

The same article also notes that only a shockingly small sum of art royalties have been paid under the law– a mere $328,000 over 34 years.  Clearly not all who should have paid did so.

See Artuntitled.com for more information about the California Art Resale Royalties Law.

Friction as Artists File Suit Over Resale Royalties” by Patricia Cohen, New York Times, November 1, 2011.

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California’s Art Resale Royalties

September 19, 2011

In regards to yesterday’s posting, one concern is the effect that such corporate oriented changes to Federal artist rights would have on similar state laws.   Depending upon the scope of a Federal law, it could potentially preempt (override) an overlapping state law.  If so, it would be particularly detrimental to California artists who already have a right to receive royalties upon the resale of their artwork.

The California Arts Council (CAC) is the agency that manages the art resale law.  Here’s a seller’s guide about paying the royalties, when it is required and how to do it.  A few of main points are that the sale must occur in California and that the seller has experienced a gain in the sale.  The resale royalties are only required when the artist is a U.S. citizen or an established California resident, and is still living or no more than 20 years have passed since the artist’s death.  Another condition is that the artwork is sold for more than $1000 or exchanged for property with a fair-market value of the same or more.  If the artist or heirs cannot be found by the seller, the California Arts Council holds the funds on behalf of the artist for 7 years.  If the funds are not retrieved, then they eventually revert to CAC for the purpose of public arts projects.

See:  The California Arts Council (http://www.cac.ca.gov) and especially the section on the resale royalties law.

CAC’s list of artists who have not claimed their resale royalties.  (Interestingly, it includes some well-known names).